According to the rating agency Icra, India's renewable energy capacity addition in FY23 is estimated
India's renewable energy generation capacity addition in FY23 is estimated at 16 gigawatt (GW), according to ratings agency Icra. Prime Minister Narendra Modi pledged to increase the country's non-fossil fuel power generation capacity to 500GW and meet 50% of its energy requirements from renewable sources. India's green energy projects received $7.27 billion from 2014-15 to June 2021. Of this, $797.21 million was received during 2020-21. The government recently cleared a ₹12,031 crore plan to set up infrastructure to transmit electricity from renewable energy projects.
"Growth prospects are robust given India's commitment to reducing emissions and meeting 50% of its energy needs from renewable sources by 2030," Icra said in a statement on Monday, adding that "investment requirements remain substantial at $450 billion to $500 billion to achieve the RE capacity targets by 2030."
This green initiative is expected to assist India in meeting its climate commitments made during the COP-26 summit in Glasgow. Prime Minister Narendra Modi pledged at the November summit to double the country's non-fossil fuel power generation capacity to 500GW and to meet 50% of the country's energy needs through renewable sources by the end of this decade. India's electricity demand is expected to increase to 817 GW by 2030, according to the Central Electricity Authority.
"With a large project pipeline of over 55 GW and highly competitive tariffs offered by these projects, the outlook for capacity addition in the renewable energy (RE) sector remains favourable," the statement stated, adding, "Capacity addition experienced a strong recovery in the first eight months of FY2022, with 8.2 GW added versus 3.4 GW added in 8M FY2021."
India has met its nationally determined contribution target, with a total installed non-fossil energy capacity of 157.32 GW, or 40.1 percent of total installed capacity. Solar, wind, and hydropower each account for 48.55 GW, 40.03 GW, and 51.34 GW of this total. India's installed nuclear energy capacity is 6.78 GW.
"The backlog of projects awarded by central nodal agencies and state distribution utilities continues to be substantial, with over 55 GW of solar, wind, and hybrid capacity under development. On the basis of this pipeline, Icra anticipates that the addition of RE capacity will increase from 7.4 GW in FY2021 to 12.5 GW in FY2022 and then to 16.0 GW in FY2023 "Icra's senior vice president and co-group head of corporate ratings, Girishkumar Kadam, stated in a statement.
Around 63 GW of renewable energy capacity is currently under construction, and installed non-fossil energy capacity is expected to reach 66 percent by 2030.
"The short-term downside risks to the renewable energy sector stem from execution headwinds and supply chain challenges associated with procuring modules and wind turbine generators" (WTGs). Additionally, the average price of imported solar photovoltaic modules (Mono PERC) has increased by more than 35% in the last year, exerting upward pressure on solar energy capital costs "ojects," according to the statement.
Modi also pledged at the Glasgow summit to reduce India's total projected carbon emissions by 1 billion tonnes and the nation's economic carbon intensity by less than 45 percent by 2030, and to achieve net-zero carbon emissions by 2070. Between 2014-15 and June 2021, India's green energy projects received $7.27 billion in foreign direct investment. $797.21 million of this total was received in 2020-21.
Despite this and the recent increase in the GST rate on solar energy equipment, solar bid tariffs remain highly competitive, as evidenced by the quoted bid tariff of 2.17 per unit in December 2021. The developers' ability to secure modules within their budgeted costs and keep debt financing costs below 8.5 percent is critical to the viability of these projects. On the other hand, the wind sector continues to see subdued capacity additions as a result of execution challenges, financing challenges for a few developers, and a weak financial profile for some OEMs, all of which contribute to supply side constraints "As stated in the statement.
The government recently approved a 12,031 crore plan to build infrastructure to transmit electricity generated by renewable energy projects as part of its effort to boost green energy production and meet half of the country's energy needs from green sources by 2030.
"With regards to collection performance, the aggregate dues to RE IPPs from distribution utilities (discoms) in the eight key states increased by 43% to 194 billion in December 2021 from 136 billion in June "y 2021," according to the statement.
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